Pakistani Economic Stress Watch

yensoy · Post by **yensoy** » 05 Mar 2023 04:18

^^^^ what's the interest rate that bakis are paying to shylock ICBC for the loan? is anyone even asking that question?

hgupta · Post by **hgupta** » 05 Mar 2023 13:48

On what grounds can Iran impose a $18 billion fine on Pakistan? I am curious as to how Iran can justify that number.

Deans · Post by **Deans** » 05 Mar 2023 19:06

yensoy wrote:^^^^ what's the interest rate that bakis are paying to shylock ICBC for the loan? is anyone even asking that question?

Most of this money - I believe it is $ 1.3 billion out of 2, is an extension of existing loans, since Pak can't pay back. In all probability the
renegotiated loan will be at a higher rate of interest. The last time Pak borrowed from an international bank, it was at an interest of 4.9% (in $),
so in Pak Rupees, the interest could easily be over 20%

A_Gupta · Post by **A_Gupta** » 05 Mar 2023 21:50

The ICBC loan to Pakistan in 2020-21 was at 3-month-LIBOR + 2.75%
(e.g., https://www.gatewayhouse.in/understandi ... t-problem/ )

The current 3-month-USD-LIBOR is somewhere near 5%. (AFAIK, LIBOR Is being phased out.)

The same link says "Earlier work done by Gateway House has shown that some of the loans made for CPEC Power projects were at Libor + 4-4.5%".

Being very conservative, it suggests that ICBC has rolled over the loan to Pakistan at >9% (in dollar terms). Given the drop in Pakistan's credit rating, likely the interest rate is much higher.

Relevant for repayment of that loan is not what the Pakistan rupee is today but how much more is it likely to drop. Also relevant is the term of the loan. If it is a short-term loan, Pakistan will have to get it rolled over yet again.

Just how much China is squeezing Pakistan (again from the same link:)

The absolute amounts also don’t capture the different interest rates and tenures –most of the multilateral loans (ADB and WB) are for 25-30 years and have been made at much lower rates (Libor + 0.6%), while loans from Chinese ‘commercial banks’ are for shorter tenures (1-3 years) and at higher interest rates (Libor + 2.75%-3%). This means that while ADB/WB lending is around 3%, loans made by Chinese banks are 5.5%-6% at present rates.
....

The higher interest rates become evident when viewed along with at Pakistan’s interest payments to its creditors. During 2019-20, the total lending to Pakistan by Paris Club Countries and China was about the same – but the interest outflow on Chinese loans was four times higher.....

Neela · Post by **Neela** » 05 Mar 2023 21:55

https://www.dawn.com/news/1740485/infla ... affordable
Inflation so high that ‘living seems unaffordable’

Bleak 4 minute read. The disaster is unravelling and Pak is just one major false move from someone to fall into chaos.

A_Gupta · Post by **A_Gupta** » 05 Mar 2023 23:02

IMO, Pakistan will get through its current crisis. China, Saudi, UAE, Qatar etc., will not let it sink.

IMO, the key question is will they force the required reforms to put Pakistan on a sustainable trajectory, or will they let Pakistan yet again postpone the reckoning?

I was trying to remember where India stood in 1990 when its economic reforms that put it on the current growth trajectory first started, and how Pakistan today compares to the India of 1990. Putting hands on numbers is not easy, but my suspicion is that Pakistan today is a worse situation, e.g., just to take one statistic, percentage of children in school and average years of schooling, relative to what India was in 1990. So, I think that even if Pakistan starts on a path of reform, it will take many years for it to climb out the hole that it is in. When you start educating your population, it takes many years for the positive effects to show. And the probability that Pakistan will undertake the necessary reforms is low.

So, IMO, don't expect an implosion; don't expect a robust recovery; I expect that Pakistan will be extricated from the current crisis with none of the foundational problems resolved, and the decay will continue. Its problem is that the longer it delays, the harder it becomes to change.

yensoy · Post by **yensoy** » 06 Mar 2023 00:18

Thank you for the Gateway House article. Yes we can assume the interest rate will be no less than LIBOR+4% given the high risk of default and this being a purely commercial Chinese entity which would have been goaded by the PRC government to make the loan at whatever interest it considered fair.

A_Gupta wrote:IMO, Pakistan will get through its current crisis. China, Saudi, UAE, Qatar etc., will not let it sink.

You left out US & UK in the countries which will not let Pak sink. Those IMHO are the biggest interests because Pak offers cheap insurance against India's rise. Also a nice way to sell arms to India - give 100M$ toys to the boyz and we will be forced to purchase 1B$ work of weaponry for top dollar.

A_Gupta wrote:I was trying to remember where India stood in 1990 when its economic reforms that put it on the current growth trajectory first started, and how Pakistan today compares to the India of 1990.

Sir the biggest difference is will. We had a will to succeed, we had a will to get away from the ignominy of going bankrupt and being forced to approach the IMF. We had a system in place for education and population control. We had pride in our history and our desired place in the world. We knew we had to stand on our own legs and nobody would or could help us do so in the long run.

There is no will in Pak. They have no shame. They have no plan. They have no seeds of education or sustainability planted for the long-term good. They have no pride in themselves. It's pathetic that the fifth (and soon the fourth) largest population has no sense of self and feels it is entitled to mooch off the rest of the world.

sanjaykumar · Post by **sanjaykumar** » 06 Mar 2023 00:24

The last paragraph might be correct. The question is why?

A_Gupta · Post by **A_Gupta** » 06 Mar 2023 00:30

It is not that Pakistanis are not self-aware. The first part of this speech on Youtube spells it out quite clearly. (The title of the Youtube is click-bait.)

vimal · Post by **vimal** » 06 Mar 2023 00:34

You only have to listen to a few Pakjabi YouTubers to understand their mentality. They’ve defeated the baniyas in 47 and Christians in Afghanistan single-handedly. They are ready to raise another army for Gazwa-e-hind and will defeat the baniyas once and for all.

CalvinH · Post by **CalvinH** » 06 Mar 2023 00:40

sanjaykumar wrote:The last paragraph might be correct. The question is why?

Self respect, will and aspiration are tied to the middle class. In Pakistan the middle class is non-existent. In Pakistan an ever growing non-significant number of elites rule over a large poor class. Poor have no self respect or will. The elite class will also do anything for self preservation. Full of bluster outside they will quickly pimp themselves to the highest bidder behind the walls or do a GUBO when threatened.

yensoy · Post by **yensoy** » 06 Mar 2023 00:43

A_Gupta wrote:It is not that Pakistanis are not self-aware. The first part of this speech on Youtube spells it out quite clearly. (The title of the Youtube is click-bait.)

This fellow, after all, is a Memon and somewhat better tuned in. BTW, he did raise the point about population growth, good for him. But this is likely not going anywhere. "We all know what needs to be done but we have no willingness to do it"

That youtube video has a kafir lotus pillar in the background. I say that kafir location should be taught a lesson.

VishnuS · Post by **VishnuS** » 06 Mar 2023 10:20

Deans wrote:
yensoy wrote:^^^^ what's the interest rate that bakis are paying to shylock ICBC for the loan? is anyone even asking that question?
Most of this money - I believe it is $ 1.3 billion out of 2, is an extension of existing loans, since Pak can't pay back. In all probability the
renegotiated loan will be at a higher rate of interest. The last time Pak borrowed from an international bank, it was at an interest of 4.9% (in $),
so in Pak Rupees, the interest could easily be over 20%

I doubt the interest is just 4.9%.

Only a few days ago Pak had taken $700M loan @10% interest from China.

If this is a rollover of old loan, why will the interest will be any lower than 10%.

All the non Chinese lenders are waiting for IMF approval and Pak has yet to comply for all the conditions and the important one being declare the income of all Grade 22-27 employees of Pakistan (Including Armed Forces) and reduce the funding of Armed forces. Pak hasn't complied to these conditions.

So.... Moreover, Pak has to pay close to $10B loan by end of June. I am not sure how much of it had been paid or rolled over...

VishnuS · Post by **VishnuS** » 06 Mar 2023 10:41

A_Gupta wrote:IMO, Pakistan will get through its current crisis. China, Saudi, UAE, Qatar etc., will not let it sink.

IMO, the key question is will they force the required reforms to put Pakistan on a sustainable trajectory, or will they let Pakistan yet again postpone the reckoning?

I was trying to remember where India stood in 1990 when its economic reforms that put it on the current growth trajectory first started, and how Pakistan today compares to the India of 1990. Putting hands on numbers is not easy, but my suspicion is that Pakistan today is a worse situation, e.g., just to take one statistic, percentage of children in school and average years of schooling, relative to what India was in 1990. So, I think that even if Pakistan starts on a path of reform, it will take many years for it to climb out the hole that it is in. When you start educating your population, it takes many years for the positive effects to show. And the probability that Pakistan will undertake the necessary reforms is low.

So, IMO, don't expect an implosion; don't expect a robust recovery; I expect that Pakistan will be extricated from the current crisis with none of the foundational problems resolved, and the decay will continue. Its problem is that the longer it delays, the harder it becomes to change.

Bhai, I don't think UAE, KSA will come forward!

1. UAE are business minded, if they invest, they want return. Till now, if you see UAE loans then you'll observe that they had taken a portion of something(Highways, Airports, etc) as collateral. UAE knows how those assets are performing and if I remember correctly, they had requested ownership of some of those collateral assets so that they can be maintained properly and make them profitable, long story short, nothing had happened! Now when S&P, Moodys both have rated them as Caa-. Only two steps away from default. Given the business mind, UAE will not invest. Even if they do, it definitely will not help Pak.

2. KSA has started working on the most ridiculous infrastructure project on earth NEOM. It's estimate is $500B on day 1 of the project. None of KSA's projects were completed on budget or on time. Moreover they are taxing their own citizens! Only a month ago they said, they're done helping freeloaders like Egypt and Pak. I doubt KSA will fund Pak.

3. I don't know about Qatar situation, will they help? Let's see.

4. China will help enough to make Pakistan float, the question is how long they're going to do so. IMF conditions are not easy, I'd like to wait till end of June whether China will give additional loans, because Pak will need additional loans to stay afloat till end of June!!

Coming to "Comparing India in 1990's to today's Pak", well, there was a time we had less than $500M in our Kitty, Pak isn't in such a dire state. Pak is getting cheaper/free fuel compared to us in 90's. But, we had one advantage, we had educated population and markets was willing to invest, but that's not the case with Pak, Market is running away and Pak population is not educated enough.

PS. I am eagerly waiting for the implosion!

Neela · Post by **Neela** » 06 Mar 2023 11:22

Another metric for state collapse has been triggered.
https://www.dw.com/en/pakistan-drug-com ... a-64861867

Pakistan: Drug firms head for closure amid economic crisis

Medicine production in the South Asian nation has plunged by 21.5% in recent months — mainly due to the prolonged refusal of commercial banks to facilitate the import of raw materials.

"Four pharmaceutical MNCs [multinational companies] have already left the country and another has gone for force majeure, while 40 local companies have formally told us that they're heading for a shutdown due to the unaffordable cost of production," he said.

I think we can now say that the collapse is fully underway. Food (Atta) is scarce . Power outages are very common. Textiles and production are hit. Now medicines and hospitals are shutting down.
Just dont see it going any other way that downhill from here with a full blown political crisis as well.
What exacerbates the problem for Pakis is that there isnt anyone who has even basic common sense to handle the situation. It requires immense statesmanship, trust , intellgience from somone to lead the recovery from here on. Who is there in Pak who can deliver. We only know rabble rousing monkeys and a the army who wield power.
What really matters now is not whether but how fast .

Aditya_V · Post by **Aditya_V** » 06 Mar 2023 12:19

Neela wrote:Another metric for state collapse has been triggered.
https://www.dw.com/en/pakistan-drug-com ... a-64861867

[
"Four pharmaceutical MNCs [multinational companies] have already left the country and another has gone for force majeure, while 40 local companies have formally told us that they're heading for a shutdown due to the unaffordable cost of production," he said.
I think we can now say that the collapse is fully underway. Food (Atta) is scarce . Power outages are very common. Textiles and production are hit. Now medicines and hospitals are shutting down.

why not move a pure Beef and cattle meat based diet, raise live stocks give up farming, cut all the mango trees export wood, coal to India at deep discount.

chetak · Post by **chetak** » 06 Mar 2023 12:24

Aditya_V wrote:
Neela wrote:Another metric for state collapse has been triggered.
https://www.dw.com/en/pakistan-drug-com ... a-64861867

[

I think we can now say that the collapse is fully underway. Food (Atta) is scarce . Power outages are very common. Textiles and production are hit. Now medicines and hospitals are shutting down.
why not move a pure Beef and cattle meat based diet, raise live stocks give up farming, cut all the mango trees export wood, coal to India at deep discount.

Remember zia-ul-haq and the fortuitous part that mango trees played in paki history.

Aditya_V ji,

please do not badmouth paki mango trees.

They are the only reliable and steadfast friends that we have there

Dilbu · Post by **Dilbu** » 06 Mar 2023 13:09

Saudi deposits nod crucial for clinching IMF deal

ISLAMABAD: Pakistan requires confirmation from Saudi Arabia for securing additional deposits of $2 billion and a $950 million loan programme from the World Bank and Asian Infrastructure Investment Bank (AIIB) for the signing of a Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) within the coming week.

“We are hopeful,” was the brief response on Sunday from a top government official dealing with the IMF when inquired about the possibility of getting confirmation on deposits from Saudi Arabia and a loan from the World Bank.

The World Bank’s Resilient Institution for Sustainable Economy (RISE-II) has offered AIIB lending of $950 million but it could only be secured provided the IMF programme was restored.

Another top official said that Pakistan was expecting to strike the SLA within the next few days, however, the IMF side was reluctant to give any time frame for when the agreement would be signed.

China had already re-financed two commercial loans of $1.2 billion in two instalments, $700 million and $500 million. Now two more instalments of $500 million and $300 million would be re-financed by Chinese commercial banks in the coming days.

Dilbu · Post by **Dilbu** » 06 Mar 2023 14:08

FLOUR PRICE REACHES UP TO RS2,800/20-KG BAG IN QUETTA

Amid a shortage of flour, the 20-kg bag of flour is being sold between Rs2,640 to 2,800 in Balochistan’s capital of Quetta, ARY News reported.

The price of flour is skyrocketing in Quetta due to the shortage of commodities. Sensing the opportunity, the profiteers have become active and selling the flour bag of 20kg between Rs2,640 to 2,800 in Quetta and its adjoining areas.

The residents of Quetta said that they are unable to get the flour at the government’s fixed rate and are compelled to buy the commodity at an excessive price.

A_Gupta · Post by **A_Gupta** » 06 Mar 2023 19:48

https://twitter.com/steve_hanke/status/ ... 4864862210

Who is Steve Hanke, who tweets:

The Pakistan Bureau of Statistics released its inflation figure for February at 31.6%/yr. It’s BOGUS! Today, I accurately measure inflation in PAK at 67%/yr, That’s 2.1x the official rate. The Pakistan Bureau of Statistics produces rubbish.

Deans · Post by **Deans** » 06 Mar 2023 19:48

VishnuS wrote:
Deans wrote:
Most of this money - I believe it is $ 1.3 billion out of 2, is an extension of existing loans, since Pak can't pay back. In all probability the
renegotiated loan will be at a higher rate of interest. The last time Pak borrowed from an international bank, it was at an interest of 4.9% (in $),
so in Pak Rupees, the interest could easily be over 20%
I doubt the interest is just 4.9%.

Only a few days ago Pak had taken $700M loan @10% interest from China.

If this is a rollover of old loan, why will the interest will be any lower than 10%.

So.... Moreover, Pak has to pay close to $10B loan by end of June. I am not sure how much of it had been paid or rolled over...

For most of the last 20 years, LIBOR was between 1 & 2%. It is only recently that it has climbed to around 5% (also briefly in 2008)
The ADB has typically lent to Pak (and Pak like countries) at 2%
A 4.9% interest rate is actually very high, for International agencies giving countries loans.
Adani last raised money through bonds overseas (commercial lending, as opposed to concessional lending to a country) at 3.5-4.5%

sanjaykumar · Post by **sanjaykumar** » 07 Mar 2023 05:48

The solution for Pakistan is youth in Asia.

Bart S · Post by **Bart S** » 07 Mar 2023 05:50

sanjaykumar wrote:The solution for Pakistan is youth in Asia.

Ah, good old Benny Hill

sanjaykumar · Post by **sanjaykumar** » 07 Mar 2023 06:44

I did not know Benny was also thinking of youth bulges. Well….actually that’s all he thought about.

vera_k · Post by **vera_k** » 07 Mar 2023 07:10

As a thought exercise, if one were so motivated, would it make sense to set up a PKR printing press? I suspect it would, since the official exchange rate overvalues the PKR by quite a bit.

Thakur_B · Post by **Thakur_B** » 07 Mar 2023 07:15

vera_k wrote:As a thought exercise, if one were so motivated, would it make sense to set up a PKR printing press? I suspect it would, since the official exchange rate overvalues the PKR by quite a bit.

In a few months the output of the printing press won't be worth the input material.

Deans · Post by **Deans** » 07 Mar 2023 08:23

yensoy wrote:^^^^ what's the interest rate that bakis are paying to shylock ICBC for the loan? is anyone even asking that question?

Its more subtle than that (see my article on CPEC). In general, ICBC provides a loan for Pak to buy overvalued Chinese assets. Hence, a power plant that Pak does not need and which has a value of $ 100 million, is sold to Pak at $ 200 mil, for which ICBC provides a loan. What may appear to be for e.g. 4% interest on a 200 mil loan, is in reality 8% on 100. The problem is exacerbated because Pak either does not need the power the plant produces, or the customers can't afford it.

Bart S · Post by **Bart S** » 07 Mar 2023 16:09

sanjaykumar wrote:I did not know Benny was also thinking of youth bulges. Well….actually that’s all he thought about.

He did a 'Youth in Asia/Euthanasia' skit (as did a lot of other famous comedians but I can't find it on YouTube now.

Dilbu · Post by **Dilbu** » 07 Mar 2023 17:03

China asked to roll over $2bn deposits, Pakistan informs IMF

ISLAMABAD: Pakistan has communicated to the International Monetary Fund (IMF) that Islamabad has requested China to rollover $2 billion State Administration of Foreign Exchange (SAFE) deposits by a year, reported The News on Tuesday citing sources.

“We have already made the request to the Chinese side for granting rollover of $2 billion SAFE deposits, which is going to mature by end of the ongoing month,” sources told the publication.

According to the report, the Ministry of Finance and State Bank of Pakistan (SBP) shared their external financing plan during Monday night’s virtual parleys with the Fund. Pakistan has communicated to the IMF that it plans on raising its dwindling foreign exchange reserves to the $10 billion mark by end of June.

Finance Minister Ishaq Dar had told reporters last week that external financing confirmation was not part of prior action of the IMF for signing of a staff-level agreement and it was agreed between the two sides that the Fund would help Islamabad secure its confirmation on external financing needs.

However, sources said that there were nine tables under the Memorandum of Economic and Financial Policies (MEFP) that require to be fulfilled with the official figures, and one of the tables was related to envisaging the Net International Reserves (NIR) as an indicative target which could not be fulfilled without incorporating the external financing needs of the programme period.

Dilbu · Post by **Dilbu** » 07 Mar 2023 17:09

Beggars cannot be choosers

On the insistence of the International Monetary Fund (IMF), the federal government and the State Bank of Pakistan (SBP) did something last week that will deepen the ongoing political and administrative chaos, cripple the economy and multiply the miseries of 230 million Pakistanis. But they had to. Beggars cannot be choosers.

The federal government slapped a permanent debt servicing surcharge on electricity to generate Rs335 billion. This surcharge is the cruellest and most unjustified of all government levies. The government has levied it to partly reduce the circular debt of Rs800 billion parked in the state-run company.

But external debt payments of $6bn due between now and end-June means one cannot expect a major and durable recovery in the rupee value in the months ahead. The rupee’s overnight recovery from Rs285.09 per US dollar on March 2 to Rs278.46 on March 3 was just the result of profit-selling.

There are also no chances for exports to grow too fast in the coming months on exchange rate advantage. Withdrawal of energy subsidies coupled with the recent hiking of energy tariffs, historic high-interest rates, and the current heightened political turmoil may prevent export growth.

Remittances’ response towards the rupee depreciation will be neutral on balance. On the one hand, there are chances that part of Pakistan’s ill-gotten wealth stashed abroad may start coming back disguised under remittances.

But on the other hand, average overseas Pakistanis who finance the expenses of their families in Pakistan may now remit even lesser volumes of foreign exchange if they don’t want an increase in these expenses in the rupee terms.

Pakistan has long been relying on the IMF for a balance of payments support and harsh conditions imposed every time by the Fund are nothing new for Pakistanis. But this time around, the IMF conditions appear to be too difficult. Not meeting all the commitments frequently has also led to a harsher IMF attitude.

That said, there is an urgent need for a real “belt-tightening” — aimed at slashing all non-essential administrative expenses — instead of politically-motivated, self-deceiving cuts. There is also a need to ensure that even the most powerful people, institutions and businesses pay energy bills regularly.

Aditya G · Post by **Aditya G** » 08 Mar 2023 05:57

Assuming default is imminent or latest by June 2023, what are the practical fallouts of same?

There is no news of cancellation of foreign arms purchases for example. Is that going to happen with default?

Rana · Post by **Rana** » 08 Mar 2023 07:46

https://twitter.com/i/status/1632565386221690883
When the credits are low and the debts are high

suryag · Post by **suryag** » 08 Mar 2023 07:50

We should prepare for a 50km buffer zone within current pak territory to deal with a chakma/mandapam kind of a situation

williams · Post by **williams** » 08 Mar 2023 09:03

Aditya G wrote:Assuming default is imminent or latest by June 2023, what are the practical fallouts of same?

There is no news of cancellation of foreign arms purchases for example. Is that going to happen with default?

They can survive on life support for quite a long time unless the common Abduls demand change. We need to keep the power dry since Paki Fauj may have to resort to a good distraction to keep the abduls occupied.

rajsunder · Post by **rajsunder** » 08 Mar 2023 09:35

A_Gupta wrote:IMO, Pakistan will get through its current crisis. China, Saudi, UAE, Qatar etc., will not let it sink.

IMO, the key question is will they force the required reforms to put Pakistan on a sustainable trajectory, or will they let Pakistan yet again postpone the reckoning?

I was trying to remember where India stood in 1990 when its economic reforms that put it on the current growth trajectory first started, and how Pakistan today compares to the India of 1990. Putting hands on numbers is not easy, but my suspicion is that Pakistan today is a worse situation, e.g., just to take one statistic, percentage of children in school and average years of schooling, relative to what India was in 1990. So, I think that even if Pakistan starts on a path of reform, it will take many years for it to climb out the hole that it is in. When you start educating your population, it takes many years for the positive effects to show. And the probability that Pakistan will undertake the necessary reforms is low.

So, IMO, don't expect an implosion; don't expect a robust recovery; I expect that Pakistan will be extricated from the current crisis with none of the foundational problems resolved, and the decay will continue. Its problem is that the longer it delays, the harder it becomes to change.

It will be kept like a patient who stays permanently in ICU.

A_Gupta · Post by **A_Gupta** » 08 Mar 2023 11:19

Aditya G wrote:Assuming default is imminent or latest by June 2023, what are the practical fallouts of same?

There is no news of cancellation of foreign arms purchases for example. Is that going to happen with default?

When you start seeing action in certain foreign capitals bracing for the impact of a Pakistani collapse, then you may be sure that they have finally given up on Pakistan. Absence of such activity is one indication that they will not let Pakistan drown.

Neela · Post by **Neela** » 08 Mar 2023 11:26

A_Gupta wrote:
Aditya G wrote:Assuming default is imminent or latest by June 2023, what are the practical fallouts of same?

There is no news of cancellation of foreign arms purchases for example. Is that going to happen with default?
When you start seeing action in certain foreign capitals bracing for the impact of a Pakistani collapse, then you may be sure that they have finally given up on Pakistan. Absence of such activity is one indication that they will not let Pakistan drown.

Bracing for what impact ? Can you elaborate please.
Pakis aint got sh1t.
And even if there is a slight indication of the any of the four fathers were willing to help, Pakis would have done a lungi dance by now.

Dilbu · Post by **Dilbu** » 08 Mar 2023 11:29

The best scenario IMO is one of the four fathers bailing out TSP at this juncture. That would mean pain for the four father and only life support till next crisis for TSP. The last thing we need is an implosion driven refugee crisis or TSP defaulting and deciding to do some actual reforms.

Dilbu · Post by **Dilbu** » 08 Mar 2023 11:34

IMF objects to direct borrowing

ISLAMABAD: The International Monetary Fund (IMF) has raised objections to Pakistan’s plan to directly borrow from local commercial banks in relaxation of competition rules, resisting the move that might cause distortion in the debt market.

The objections were raised during a meeting held on Monday between Pakistani authorities and an IMF team, according to sources. The IMF did not endorse federal cabinet’s decision in which the Ministry of Finance was authorised to borrow from commercial banks in closed-door negotiations.

CalvinH · Post by **CalvinH** » 08 Mar 2023 11:48

All other fathers used to work on the signal from US. And US interest is lacking this time. For US giving money to Pakistan is same as giving money to China for its BRI initiative. Doesn't make sense. And there is this minor issue of Pakistan defeating US in Afghanistan and claiming victory.

The only other one with money is China. But they are hesitating as the liability could be much bigger. Helping Pakistan will set up a precedent. BRI has got many countries in significant debt and once you give Pakistan an exception, all other countries will line up for it.